JP Morgan’s (JPM) CEO, Jamie Dimon was interviewed on CNBC this afternoon and made some very interesting comments. Below is a recap of some of those comments:
- “We’re not planning to charge for deposits” This comes after rumors and speculation that several banks were planning to charge around 13 basis points for funds deposited. Meaning that for every $1,000 deposited you would be charged $1.30. While that doesn’t seem incredibly high, it is extremely lucrative that the banks get to charge you for the money you deposit and then also utilize that money to loan out and make a profit. Banks are currently paying some of the lowest interest rates on deposits and now they are charging to hold your money.
- “Very Optimistic in the long run”
- “Guarantees stock (JP Morgan) will be higher in 5 years” Who in their right mind can guarantee anything in this market condition. We understand that he is trying to instill market confidence but can we really take this seriously.
- “S&P Downgrade of US isn’t that material” If it really wasn’t that material then what is the point of having credit agencies? If anything it gives the US a wake up call to make some changes.
We should make sure to use some common sense when listening to some of these interviews. While rhetoric can be good to instill confidence it can also give us a false sense of hope in a time when a more practical approach and caution is warranted.
The video interview has the “guarantee” comment right at the very end. Nice!